Morgan Creek Digital Has $1 Million on Crypto Versus S&P 500

The cryptocurrency market is nowhere close at the moment, but it has ten years to catch up.

Morgan Creek Digital, the cryptocurrency investment arm of North Carolina-based Morgan Creek Capital Management, wants to bet that the cryptocurrency market will be more valuable than the index of S&P 500 within ten years.

$1 million to any takers

Standard & Poor’s 500 is a stock market index that tracks the value of 500 American companies. It has been in operation since 1923, and the the fund has a current market capitalisation of around $2.6 trillion.

The cryptocurrency market is currently worth $107.4 billion according to coinmarketcap.com, and at the beginning of the year, it was worth $823.8 billion. On the other hand, Bitcoin’s market capitalisation was bigger than those of 97 percent of companies on the S&P 500 as of October, according to Ibinex.

The wager is of $1 million, to any takers. The company says that the money will be donated to charity.

Buffett Bet 2.0

American billionaire Warren Buffet once bet $1 million that the S&P 500 would beat a group of hedge funds selected by Protégé Partners by being more valuable by the end of 2017, a bet which he won. So, Morgan is calling this stunt ‘Buffett Bet 2.0’.

Morgan Creek Digital Partner Anthony Pompliano said: “This is a combination of our outlook not only for the upside of cryptocurrencies but also the outlook on public equities,” Pompliano told CNBC in a phone interview. ” A lot of people might look at this and just think we’re bullish on crypto — but you need to look at what asset we’re going up against. Public equities aren’t exactly at their all time highs either.”

Morgan Creek was established in 2004 by Pompliano and the former chief investment officer of the University of North Carolina, Mark Yusko. It manages around $1.5 billion in investments, according to Forbes.

The cryptocurrency index began in August. It is only available for high net worth people and companies, with a minimum payment of $50,000. The fund tracks the total value of the nine of most valuable cryptocurrencies.

The fund excludes XRP, the token associated with payments company Ripple with a market value of around $12 billion. This is because too large a proportion of the circulation is in the possession of Ripple, and because the definition of XRP is still in legal limbo in the US. Said Pompliano: “If there’s a central party that owns 30% or more of supply then we withhold those from the index because we think that introduces a lot of additional risk that may not be there if it was a more decentralized network.”

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